THE IMPACT OF FINANCIAL PLANNING, DEBT MANAGEMENT, AND LIQUIDITY ON UNIVERSITY FINANCIAL EFFECTIVENESS AND SUSTAINABILITY

Abstract

Public universities in China, particularly in less-developed regions such as Sichuan, are increasingly operating under fiscal pressures caused by declining government subsidies, rising operational costs, and shifting decentralization reforms. This study investigates how three financial governance mechanisms—financial planning and budget control (FPBC), debt management and financing (DMF), and liquidity management (LM)—affect the sustainability of local public universities within the framework of regional governance and fiscal accountability. Drawing on survey data from 488 university financial administrators, partial least squares structural equation modeling (PLS-SEM) was applied to assess both direct and indirect effects of these practices on institutional sustainability through the mediating role of financial management effectiveness (FME). The findings reveal that FPBC, DMF, and LM exert significant and positive direct effects on sustainability, while the mediating influence of FME is not statistically significant. This suggests that internal financial effectiveness alone is insufficient to ensure long-term sustainability without external policy coordination and early warning mechanisms linking universities and local governments. The study contributes to the field of local governance by demonstrating how sub-national higher-education finance reforms and institutional financial governance practices jointly influence regional fiscal resilience and sustainable public-sector performance.